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There is no exact answer to the valuation of a healthcare practice

Posted by practicesales on February 13, 2015
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You might be surprised to know that healthcare practice valuation is not a licensed activity, like medical practice brokerage or even real estate valuation. Yes, you need a license to cut hair, but not to provide a value on a healthcare practice. But for a new practitioner starting their own practice, this could determine their largest financial transaction. To a retiring practitioner, a practice valuation may decide the amount of equity and hard work built over a career.

One of the biggest rewards that come from building a small practice can be selling it to a willing buyer, hopefully for a good profit. But the reality is that most practices don’t put their best foot forward when selling.

Healthcare practices are already completely undervalued when compared to other businesses. On this basis alone, it is crucial that you acquire an independent valuation from a reputable valuer who specialises in the healthcare market.

A realistic price is also essential because the current market does not reward overly ambitious prices. Before starting the sales process, you should therefore understand how much your potential buyer is likely to walk away with after paying things such as tax, staff entitlements and bank debt. You need to be able to demonstrate your practice’s financial performance.

While not every practice will bring in a life-changing sale, there are some basic things that should be done – and professional help is available.

Ideal Practice specialises in practice sales and valuations of healthcare practices and follows strict standards of compliance and ethics. If you are thinking about selling your practice or simply need some advice on how to obtain a valuation for your practice, just send us an email to sales@idealpractice.com.au or call us on 1300 652 361.

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